An early prediction for the 2024 cost-of-living adjustment (COLA) applied to military retirement, Social Security, and other federal payments predicts a continued increase in prices, but a final figure far below last year’s 8.7% rate.
An analyst for The Senior Citizens League (TSCL), a nonprofit advocacy group affiliated with TREA: The Enlisted Association, estimates next year’s figure at “around 3.1%” in a May 10 press release. While this is less than half the 2023 boost, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) would still need to rise in the coming months for it to take effect. In other words, prices would need to keep going up.
[RELATED: MOAA's COLA Watch]
The April CPI-W figure, released in May, was 2% above the yearly baseline. For the TSCL prediction to take effect, the average of the fiscal year’s final three CPI-W figures (July, August, and September) would need to be 3.1% above that baseline.
It’s far from unreasonable – last year’s index shot from 6% to 9% above its baseline from April to June before leveling off slightly. A spike in food, fuel, and housing prices contributed to the boost; Congressional Budget Office (CBO) projections don’t show a similar increase, but even a slight one could be enough for the index to reach TSCL prediction.
While a 3.1% hike would be a significant drop from last year and the 5.9% increase in 2021, those two years are the outliers – aside from those years, the adjustment hasn’t topped 3% in more than a decade. You can find the full list of Social Security adjustments at this link, with two important caveats: The years reflect when the first COLA payment is made (December, in most cases, meaning the 2022 figure applied to nearly all of 2023), and the Social Security adjustment wasn’t always used to determine the military retiree pay increase.
Why MOAA Tracks COLA
A fair cost-of-living adjustment is key to protecting the purchasing power of a military retiree’s service-earned benefit. Maintaining the benefits earned by those who’ve served has been at the core of MOAA’s advocacy mission since the association’s inception; more details on MOAA’s work in the COLA space over several decades can be found at this link.
While there has been little movement in recent years to decouple retiree COLA from the adjustment paid to Social Security beneficiaries, MOAA did take notice of a CBO proposal to change the overall COLA calculation as a budget-balancing technique – a move that would take $250 billion from federal beneficiaries (many of them 65 or older). As with other proposals in that CBO report – including some garnering significantly more interest among veterans – this option has yet to take shape in legislation.
Keep up with the latest on COLA and other advocacy issues at MOAA’s Advocacy News page, and visit MOAA.org/finance for other financial news, guidance from our in-house experts, member-exclusive financial publications, links to upcoming financial webinars, and much more.
MOAA’s Financial Calculators
Whether you’re planning for retirement, buying a home, managing your investments, or more, these tools can help you make informed decisions.